1. Global Marketing
Global trade accounts for 25 percent of the U.S. gross domestic product
Exporting - Marketing domestically produced goods and services in foreign countries
Importing - Purchasing foreign goods and services

2. Top U.S. Trading Partners—Total Trade Including Exports and Imports

3. World’s Ten Largest Marketers (Ranked by Annual Sales)

4. The Importance of Global Marketing
Demand for foreign products is increasing in fast-growing economies
Globalization and the Internet allow every marketer to be an international marketer

5. Service and Retail Exports
Nearly four of every five dollars in the nation’s gross domestic product comes from services
United States is the world’s largest exporter of services and retailing
Profitable exports include services such as engineering, financial, computing, legal services, insurance, and entertainment

6. Benefits of Going Global
Additional revenue
New insights into customer behavior
Alternative distribution strategies
Advance notice of new products
A major key to achieving success in foreign markets
Ability to adapt products to local preferences and culture

7. International Economic Environment
Factors that determine a nation’s prospects as a host for international business expansion
Size
Per-capita income
Stage of economic development

8. International Economic Environment
Infrastructure is an important economic factor to consider when planning to enter a foreign market
Changes in exchange rates can complicate international marketing
Exchange rate - Price of one nation’s currency in terms of another country’s currency

9. International Social-Cultural Environment
To be effective, marketers must understand a nation’s culture
Language plays an important role in global marketing

10. International Technological Environment
The Internet transcends political, economic, and cultural barriers to reach every corner of the globe
Technology presents challenges for global marketers that extend beyond the Internet and other telecommunication innovations

11. International Political-Legal Environment
Global marketers must stay abreast of laws and trade regulations in each country in which they compete
Firms set up internal political risk assessment units
The political environment involves labor conditions in different countries

12. International Political-Legal Environment
International law
U.S. has friendship, commerce, and navigation (FCN) treaties with other governments
Europe has pushed for mandatory ISO certification to standardize quality levels

13. International Political-Legal Environment
U.S. law
Various trade regulations, tax laws, and import and export requirements affecting international marketing
Export Trading Company Act of 1982 exempts exporters from antitrust regulations
Foreign Corrupt Practices Act makes it illegal
to bribe a foreign official in an attempt to
solicit new or repeat sales abroad

14. International Political-Legal Environment
Legal requirements of host nations
Example: Despite China’s many advances in recent years, the Chinese government continues to censor the Internet

15. Trade Barriers Barriers fall into two major categories
Tariff - Tax levied against imported goods
Administrative barriers
GATT and WTO agreements have eliminated many tariffs on many products
Countries frequently use nontariff barriers to boost exports and control the flows of imported products

16. Tariffs Two types of tariffs
Revenue tariffs - Designed to raise funds for the importing government
Protective tariffs - Designed to raise the retail price of an imported product to match or
exceed that of a similar domestic product

17. Other Trade Barriers
Import quotas - Limit the number of units of products in certain categories that can cross a country’s border for resale
Embargo - Complete ban on the import of specified products
Subsidies - Government financial support of a private industry
Exchange control - Method used to regulate international trade among importing organizations by controlling access to foreign currencies

18. Dumping
Controversial practice of selling a product in a foreign market at a price lower than what it receives in the producer’s domestic market

19. Multinational Economic Integration
Free-trade area in which participating nations agree to free trade among themselves, abolishing tariffs and trade restrictions
Custom union establishes a free-trade area and uniform tariffs for nonmember nations
Common market extends a customs union by seeking to reconcile all government regulations affecting trade

20. General Agreement on Tariffs and Trade (GATT)
International trade accord that has helped reduce world tariffs
In 1994, Uruguay round produced several important outcomes
Reduced farm subsidies
Increased protection for patents, copyrights, and trademarks
Included services under international
trading rules
Phased out import quotas on textiles and clothing from developing nations

21. World Trade Organization (WTO)
Succeeded GATT
Oversees GATT agreements
Serves as a forum for trade negotiations
Mediates trade disputes
Monitors national trade policies
Works to reduce trade barriers throughout the world

22. World Trade Organization (WTO)
WTO has made slow progress toward its major policy initiatives
Liberalizing world financial services
Telecommunications
Maritime markets

23. North American Free Trade Agreement (NAFTA)
Accord removing trade barriers among Canada, Mexico, and the United States
Particularly important to U.S. marketers because Canada and Mexico are two of its largest trading partners

24. The Free Trade Area of the Americas and CAFTA-DR
Proposed free trade area stretching the length of the entire Western hemisphere
Designed to extend free trade benefits to additional nations in North, Central, and South America
Central American Free Trade Agreement–DR (CAFTA-DR) - Trade agreement among the United States, Central American nations, and the Dominican Republic

25. European Union (EU)
Customs union that is moving in the direction of an economic union by:
Adopting a common currency
Removing trade restrictions
Permitting free flow of goods and workers throughout the member nations
Goal is to remove all barriers to free trade among its members

26. The 27 Members of the European Union

27. Going Global Reasons for marketers to go global
Saturation of the target market
Strong domestic market share
Globalization of customers
New customers in emerging markets
Globalization of competitors
Reduced trade barriers
Advances in technology
Enhanced customer responsiveness

28. Strategies for Entering Foreign Markets
Three basic choices
Importing and exporting
Contractual agreements such as franchising, licensing, and subcontracting
International direct investment

29. Importing and Exporting
Decision to import, or bring in foreign goods to sell domestically or use as component parts, depends on:
Ability of supplier to maintain quality
Flexibility in filling orders that vary
Response time in filling orders
Total costs

30. Importing and Exporting
First-time exporters can reach foreign customers through:
Export-trading companies
Export-management companies
Offset agreement

31. Franchising
Contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer or other franchiser
Benefits are risk reduction, standardized operations, and greater recognizability
Success depends on ability to adapt to local customer preferences

32. Foreign Licensing
Agreement that grants foreign marketers the right to distribute a firm’s merchandise or to use its trademark, patent, or process in a specified geographic area
Gives access to local partner’s marketing information and distribution channels, and protection from legal barriers
Allows quick entry into a foreign market with a known product

33. Subcontracting
Contractual agreements that assign the production of goods or services to local or smaller firms
Can prevent mistakes involving local culture and regulations
Can provide protection from import duties

34. International Direct Investment
High involvement and high risk are the major characteristics
Firms choosing this method often have a competitive advantage
Several forms
Acquisition
Joint venture

35. From Multinational Corporation to Global Marketer
Multinational corporation - Significant operations and marketing activities outside its home country
Examples: General Electric, Siemens, Mitsubishi
Important changes since 1960
No longer exclusively U.S. based
Multinationals no longer think of their foreign operations as mere outsourcing appendages

36. From Multinational Corporation to Global Marketer
Employ large foreign workforces relative to American staffs
Reflect interdependence of world economies, growth of international competition, and globalization of world markets

37. Developing an International Marketing Strategy
Global marketing strategy - Standardized marketing mix with minimal modifications that a firm uses in all of its domestic and foreign markets
Can effectively market some goods and services to segments in many nations that share cultures and languages
Can be highly effective for luxury products that target upscale consumers everywhere
Major benefit is its low cost to implement

38. Developing an International Marketing Strategy
Multidomestic marketing strategy - Application of market segmentation to foreign markets by tailoring the firm’s marketing mix to match specific target markets in each nation

39. International Distribution Strategy
Marketers must set up proper channels and anticipate extensive physical distribution problems
A distribution decision involves two steps
The firm must decide on a method of entering the foreign market
It must determine how to distribute the product within the foreign market through that entry channel

40. Pricing Strategy
Competitive, economic, political, and legal factors can limit pricing decisions
Adaptation to local markets
Emergence of commodity marketing organizations

41. Countertrade
Form of exporting whereby goods and services are bartered rather than sold for cash
May be imposed in less developed nations that lack sufficient foreign currency to obtain goods and services they want
Way to control balance-of-trade problems

42. The United States as a Target for International Marketers
U.S. is an inviting target for foreign companies
Increasingly, foreign multinationals invest in U.S. assets as they seek to produce goods locally and control distribution channels

43. Strategic Implications of Marketing in the 21st Century
Marketers are pioneers in bringing new technologies to developing nations
Greatest competitive advantage belongs to marketers who capitalize on the similarities of their target markets and adapt to the differences
New and better products in developing markets will create and maintain relationships for the future